February 10th marked the 100th anniversary of Credendo, the Belgian credit insurance group. Founded in 1921 by the Belgian government to support international trade by providing guarantees and insurance, the company has since grown into an international group present in 15 European countries. In order to anticipate the profound changes that will disrupt trade in the coming years, Credendo created its innovation unit, AREA42, in early 2019. With the inauguration of the structure in December 2019 in the heart of the Palais Brongniart. Lode Vermeersch, Group Chief Strategy & Innovation Officer of Credendo and co-founder of AREA42, returns (virtually) to La Place Fintech to talk about the ins and outs of the adventure.
La Place Fintech (LPF) – Hello Lode. Could you remind our readers what the core business of Credendo, AREA42’s parent company, is?
Lode Vermeersch (LV): Hello! Credendo is a Belgian credit-insurance group, which essentially distributes two types of products: credit insurance for exporting companies, and financial guarantees for the banks that finance exporters. In both cases, the aim is to encourage companies to do business together, by ensuring that they get paid. Credendo insures the exporting company against the risk of not being paid – bearing in mind that there is often a significant time lag between the start of production and payment.
LPF – In this context, how did the idea of creating AREA42 come about?
LV: In 2018, we became aware of the need to return to Credendo’s primary raison d’être, namely the desire to facilitate business between companies. This led to the creation of AREA42, initially as a department within Credendo. The objective in creating this structure was to bring together a community of people interested in the prospect of erasing all the friction that can exist in commercial exchanges. We realised very quickly that such a goal could not be achieved alone, and that our mission was rather to bring together actors who could help us solve these problems. That is why we have built an open, inclusive community – without excluding any form of cooperation. When an idea emerges within the community, AREA42 takes charge of implementing it, thanks to the consortium of heterogeneous actors.
LPF – What makes AREA42 different from other open innovation structures?
LV: Above all, we are looking for disruptive solutions. When we think of the innovation paradigm, innovation can take two forms: either incremental and progressive, or disruptive. AREA42 aims to host innovations of the second type – which is much more difficult, as it requires a very detailed knowledge of the market to deliver the simplest possible solution. To achieve this, you have to go through a lot of experimentation, a lot of customer testing. If we think of Google’s innovation policy, it works as follows: out of 100 ideas tested, only one will prove successful. This is obviously expensive: the success rate is 1%, and the successful idea has to ‘make up’ for the cost of the other 99. But we are deliberately betting on such a vision.
LPF – How does AREA42 work? What drives the community?
LV: First of all, setting up such a community requires a lot of effort. You have to contact potential interested parties, send them relevant documentation, organise events… People who join our community are motivated by the fact that they will learn something or meet interesting people. The chemistry of human interaction does the rest.
That’s the promise of AREA42: to engage in discussion, to develop creativity, to generate ideas…
Here we never talk about Proof of Concept (PoC) but about experimentation – and I insist on this. The idea behind this is that whatever the result of the test, there will be lessons to be learned. In contrast, the terminology of PoC is binary: either it succeeds or it fails. It was while doing my PhD that I realised that it was much more beneficial to talk about experimentation.
LPF – What are the benefits when joining AREA42?
LV: The network. Our community is under construction, we are gradually thinking of adding services like facilitating access to grants. We are neither a business angel nor a VC. We favour an agile approach, and encourage participants to collaborate with each other, sometimes even without intervening ourselves. Some companies want to collaborate with us because of the data we provide or vice versa, which they use to test their ideas. Working on the principle of co-creation, our community may look chaotic from the outside, but it’s actually flexible and open. Our main working tool is slack, which we chose for three main reasons: it is an open platform, widely used by the startup community and has a nice UX.
LPF – What sectors or business models do you focus on?
LV: Our first focus is on B2B marketplaces. Over the last few months, we have seen how human beings are adapting. More and more business is done digitally, relegating human interaction to cases where it has added value. We will see similar changes in the B2B sphere. Our second focus is on the interaction between data and artificial intelligence, with its variants such as machine learning and data analytics. In these areas, we are convinced that not everything has been explored yet. Finally, we are very interested in all the new paradigms: 3D printing, blockchain, IoT or quantum computing… all technologies that will change the face of trade. In short, we are looking at everything that can help the emergence of a world where trade will be frictionless, i.e. fluid and frictionless.
LPF – Tell us about Marjory, one of the first projects incubated by AREA42…
LV: This project started as a spin-off. In June 2018, Christophe Spoerry, founder of Alpine Style, met Kamel Tansaout, who had real expertise around marketplaces. While exchanging, they noticed that one of the main pain points of marketplaces creators is the fact that once they have the idea, they focus on the front-end at the expense of the back-end. They end up getting stuck. Marjory’s raison d’être is to simplify the technical issues (integration of third party services, integration with the organisation’s / company’s IS) to allow operators to focus on designing and implementing the most efficient business workflows, and thus create value for their marketplace.
In terms of timing, things went fast: after meeting in June 2018, we created a demo after 3 months, which was presented in Paris, during the Paris B2B Rocks. We received very positive feedback. By Q3 2019, we were ready to go into production. The startup Marjory was incorporated at the beginning of 2020, and we are now about to scale. The strength of our project is that it is constantly fed by feedback from our customers – we are already on the third iteration of the product. This way, we get to know what the customer really needs, not what they think they want!
We wish Marjory and the other AREA42 projects the best of luck, which we will be following closely from Paris!
